Oil starts the new week with decline

Oil fell after rising last week after Iran’s foreign minister signaled that the Israel-Hamas conflict was nearing a diplomatic solution. Trading was quiet as many Asian markets were closed for the Lunar New Year holiday. Brent crude fell as much as 0.8% to below $82 a barrel after rising 6.3% last week, while U.S. crude traded around $76. Iran’s Hossein Amirabdollahian held talks in Beirut and discussed the possibility of freeing Israeli hostages, including senior Hamas officials. “Developments in Gaza are moving toward a diplomatic solution,” he said, without giving any details on the timing. Meanwhile, Israeli Prime Minister Benjamin Netanyahu insisted on Sunday that civilians be cleared of danger before Israel launches a military operation in the southern city of Rafah. Oil has traded around $10 for much of this year, partly offset by concerns about conflict in the Middle East and the outlook for ample global supplies and weak demand, especially from China, the second-largest consumer. U.S. crude, which helped the U.S. export an unprecedented amount last year, and production from New Mexico’s Permian Basin are seen set to reach another record this year. Major pipeline operator Plains All American Pipeline LP said in a fourth-quarter earnings presentation that production is expected to rise nearly 5% to 6.4 million bpd by the end of 2024. There are additional downside risks to demand forecasts for China, Goldman Sachs Group analysts said in a note, citing rising electric vehicle sales and talks with local consumers.